Bernanke, despite his mistakes, is one of the great figures of our age
by Ambrose Evans-Pritchard
Monetarists will not be sad to see the end of Ben Bernanke today. The outgoing chairman of the US Federal Reserve unquestionably saved the world economy after the Lehman crisis in 2008, but only after having caused the great debacle in the first place.
Let us be clear about the chain of events. Fed chief Alan Greenspan picked him to be a junior governor on the Fed Board after hearing him argue at the Jackson Hole conclave that central banks should not lean against asset booms. They should let the bubble run their course, and “clean up” afterwards. No doubt Bernanke regrets that turn of phrase.
For the next five years or so Bernanke provided an academic and theoretical cover for the Greenspan doctrine. He was more than the Sorcerer’s Apprentice. He was entirely complicit in the Fed’s tolerance of the sub-prime bubble, and all its linked deformations in leveraged finance.